Cyberattack gives big boost to security stocks

Ransomware 'WannaCry' attack explained
Ransomware 'WannaCry' attack explained

The WannaCry ransomware is a sobering wake-up call for the world: It is becoming increasingly easy for bad actors to attack companies and governments with a computer virus.

But it's also serving as a reminder to investors that cybersecurity is a big, important and growing business.

The PureFunds ISE Cyber Security ETF, (HACK) which owns shares of most of the big security companies, was up more than 3% in early trading Monday.

Another fund focusing on the group, the First Trust NASDAQ Cybersecurity ETF (CIBR), was up nearly 3% as well.

Shares of big cybersecurity companies in the index, such as FireEye (FEYE), Palo Alto Networks (PANW, Tech30), Qualys (QLYS) and Fortinet (FTNT), all rose sharply.

Related: Here's who has been hit by the ransomware attack

These and several other companies have been hot lately due to ever increasing worries about viruses, malware and other nasty bugs.

Both cybersecurity ETFs are up about 15% so far this year and 35% over the past 12 months.

(Editor's note: Are you affected by the attack? Have you paid the ransom? You can WhatsApp us on +1 347-322-0415.)

Investors have flocked to these companies because demand is on the rise for software, monitoring and other solutions that help minimize the impact of cyberattacks as well as prevent future ones.

But the expectations for future sales and earnings growth are incredibly high as well. Investors can be unforgiving if there are any signs that momentum may slow.

Related: How to protect yourself from the WannaCry cyberattack

Shares of two prominent security companies, Symantec (SYMC) and CyberArk (CYBR), plunged last week after the companies gave outlooks that were below Wall Street's forecasts.

Symantec's stock has bounced back, though, following the news of the WannaCry attack. CyberArk was lower again but the stock is still up nearly 20% in the past year.

And considering the scope of the latest attack -- FedEx, Nissan and Telefonica were targeted along with governments and hospitals -- investors may continue to flock to cybersecurity companies.

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